U.S. Taps Canada's Oil Sands -- but at an Environmental Cost
Sunday, October 12, 2008 3:54 AM
Symbols: SU, XOM
(Source: McClatchy Washington Bureau)trackingFORT McMURRAY, Alberta _ For decades, the U.S. has vowed to reduce its dependence on imported oil and to find a reliable source to meet the nation's growing oil needs.

Now, Canada offers a solution.

While oil supplies are dwindling in some places, or disrupted by hurricanes, threatened by terrorist attacks or controlled by hostile governments, Alberta's oil sands _ a patch of forest about the size of Florida with a sea of oil beneath it _ produce more crude than all the wells in Texas or Alaska.

With more than 170 billion barrels, the oil sands are the second-largest proven reserves in the world after Saudi Arabia.

Because of the Alberta oil sands, Canada has become the largest supplier of crude oil to the United States. The oil sands are booming, and production is expected to triple in a little more than a decade.

Also growing are the environmental costs _ higher greenhouse gas emissions than conventional oil and long-term destruction of a swath of deep forest. In the past few months, Alberta officials have announced new environmental policies and plans to invest $4 billion Canadian ($3.7 billion U.S.) to cut emissions. What's clear so far is that they're facing an environmental problem _ supersized.

"We're an energy province. We're now producing record amounts of oil. We have the potential to actually increase our production of oil," said Alberta energy official Christopher Holly.

"So one of the things that's beginning to happen," Holly said, "is we're beginning to recognize the need to take a look at the entire energy framework ... to look at the balance between being a supplier and also being an environmental steward."

The Alberta government controls the rights to this oil and is in charge of environmental protection. This year, the western Canadian province of about 3.5 million has an estimated $7.9 billion surplus.

Demand for fuel in North America will keep oil sands production growing from 1.2 million barrels a day in 2007 to 3.5 million to 4 million barrels a day by 2020, said Alberta Oil Minister Mel Knight. "I don't see anything on the horizon that would indicate that isn't a target that's doable."

Oil companies are expanding so fast in Alberta that the three big players _ Suncor Energy Inc., Syncrude Canada Ltd. and Albian Sands Energy Inc. _ have built their own airstrips to ferry in temporary construction workers. Exxon Mobil Corp., Royal Dutch Shell PLC and many other companies have investments in the big operators.

Workers from all over Canada, plus miners from South Africa and oil workers from Venezuela, have moved to Fort McMurray. Housing costs are sky high. The boomtown of 65,000 has an additional 27,000 temporary workers living in camper trailers and motels.

From a helicopter, the view of this growth begins with a forest of spruce, pine, poplar and aspen spotted with ancient bogs under a summer cover of bright green algae. That landscape suddenly gives way to miles of black strip mines, brownish settling ponds with a rainbow sheen, and beyond the mines, well pads amid grids of roads and cuts from geological seismic surveys.


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